KPMG elite face earnings cut

PARTNER earnings at KPMG were flat over the past year and could well fall next year, the accounting giant said. Reporting its UK results, KPMG said earnings per partner averaged £415,000. While profits grew by 8%, the take was spread more thinly as the firm increased partner numbers by 50 to 640.

Total fee income grew by 18% to £1.3bn with unexpectedly good growth in consulting work, which was up 27%, and a 33% leap in corporate recovery offset by a slowdown in corporate finance and transaction work.

Senior partner Mike Rake warned the company will achieve nothing like last year's growth in the current year. He said there are restrictions on recruitment and staffing levels are under review, adding that depending on the nature of the downturn, partners may have to live with lower earnings.

KPMG's consultants in Britain are expected to break away next year to join the New York-quoted KPMG Consulting, though Rake conceded that market conditions have complicated the timing of the split.